HEARING ADVISORY: Camp Announces Hearing on How Business Tax Reform Can Encourage Job Creation

Camp Announces Hearing on How Business Tax Reform Can Encourage Job Creation
May 26, 2011 — Hearing Advisory   
Committee Activity   
Tax Policy    Full Committee   

Congressman Dave Camp (R-MI), Chairman of the Committee on Ways and Means, today announced that the Committee will hold a hearing on major business and corporate tax issues and how changes to those aspects of the tax code, as part of comprehensive tax reform, might promote job creation and economic growth.  Whereas the two most recent Committee hearings on the business aspects of tax reform focused on international taxation, this hearing will address the taxation of domestic business operations.  The hearing will take place on Thursday, June 2, 2011, in Room 1100 of the Longworth House Office Building, beginning at 10:00 A.M.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.  A list of invited witnesses will follow.

BACKGROUND:
At a combined federal-state rate of over 39 percent, the United States has the second-highest corporate income tax rate in the developed world, trailing only Japan.  The average for countries in the Organization for Economic Co-operation and Development (OECD) is only 25.5 percent.  And as the Committee learned at its May 24, 2011, hearing on foreign tax systems, the Japanese Government intends to reduce its corporate rate by five percentage points, which soon will leave the United States with the highest corporate rate among our major trading partners.  Extensive economic research, meanwhile, has found that most of the burden of corporate tax rates is borne by workers.  Furthermore, pass-through entities pay tax at the individual income tax rates, and uncertainty surrounding the individual rate structure after 2012 has serious implications for business planning and job creation.

In addition, the Committee must consider a number of issues related to business taxation as part of comprehensive tax reform.  These issues include differences between tax accounting and financial accounting, the treatment of inventories and depreciable property, and trade-offs between marginal tax rates and targeted business tax preferences.  The Committee must investigate the purposes behind these various rules and provisions, and whether such rules and provisions serve their intended purpose.  The fact that the United States is an outlier with respect to the rates at which it taxes business income, combined with the complexity of the rules governing business taxation, make it important for the Committee to explore whether tax reform that broadens the base and lowers marginal rates could benefit the U.S. economy and American workers.

In announcing this hearing, Chairman Camp said, “While our major trading partners have spent the last two decades reducing their corporate tax rates, the U.S. corporate rate is actually higher than it was 20 years ago, and the rates that apply to small businesses are scheduled to go up in the near future rather than down.  At the same time, the tax code is full of tax preferences that attempt to pick winners and losers rather than just allowing the most promising business investments to flourish.  As the Committee continues to investigate how best to reform the tax system for American families, we also need to take a close look at the major elements of business taxation and evaluate those elements against the principles of simplicity, fairness, stability, and economic growth.”

FOCUS OF THE HEARING:
The hearing will inquire about the potential benefits to companies and workers of lowering marginal tax rates on business income, and the trade-offs that such companies might be willing to make given current fiscal constraints. The hearing also will examine major elements of business and corporate taxation in anticipation of future efforts to evaluate policy options that might encourage job creation in the United States.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select “Hearings.”  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance with the formatting requirements listed below, by the close of business on Thursday, June 16, 2011.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-3625 or (202) 225-2610.

FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the official hearing record.  As always, submissions will be included in the record according to the discretion of the Committee.  The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines.  Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below.  Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

  1. All submissions and supplementary materials must be provided in Word format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

  2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

  3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities.  If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested).  Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/.